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September 8, 2011

Lessons Learned in Crisis Management: Sept. 11

How one financial advisor effectively shared his concerns and support with clients on this tragic day.

I was cooking breakfast, an eye on the TV, when the announcement came that an airplane had hit the World Trade Center. Within minutes, that announcement morphed into the worst news I had heard since the death of JFK.

I threw out breakfast and drove to the office.

I went immediately to my computer and wrote what I have long called a “hand-holding message.” I quickly posted it to our Letters Library.

I was about to order an email broadcast to clients when a long-time Canadian client, Robert Cable, copied me on the hand-holding message he was sending his clients. His was better than mine. I pulled mine, posted his and ordered the e-mail blast.

I have not re-read Bob’s letter in nearly 10 years. It is an extraordinary letter. Someday, maybe Harvard Business School will use it as a case study in financial-crisis management.

By September 12, I decided that Bob’s message was too important to limit to Bill Good Marketing clients. We pumped out 25,000 email copies.

Within a day or so, talking heads on CNBC were talking about a letter brokers all over the country were sending. On Saturday morning, CBS Marketwatch plagiarized it. Monday morning, the markets opened 500 points down and then in the next few months did what markets do—recovered. But there were lessons learned.

First read Bob’s letter, and if you want to learn more about this extraordinary writer (also an extraordinary advisor), here’s a link to one of his websites.

Today will never be forgotten. The horrific and senseless attacks have caused unknown numbers of innocent people to lose their lives. The impact beyond the lives lost may never be known.

I want to help you through this financially by outlining from experience what is likely to happen.

First, your guaranteed investments remain solid and safe. However, there will be panic in the stock market(s) when they reopen. At this point, I do not know when markets will again open for trading. Every incident that causes a stock market panic is different. But the reaction in the markets usually has a course that is strikingly similar. So here’s where you need to sit back and think this through. Here’s what the markets are likely to do.

In every panic, the market will open way down initially. Please understand this: you cannot get out before this happens. If you rush in to sell, you will most likely get a price that is around the worst of the day.

Remember, I’ve seen this before. In the past, those who got out, did so to make themselves feel better. As time passed and they looked back, they wondered what they could have been thinking to sell at such low (panic) levels. The market, for some time, will likely be subject to wide swings based on the news of the moment. But in every case of panic, the market has recovered. I do not expect it to be any different this time.

Sure, there will be disruptions. Some companies may shut down operations for a few days. Most businesses will be impacted, some more than others.

But think for a minute about the companies you own. The Canadian bank that deals with the person down the street for their mortgage or car loan. The drug company that makes drugs for hypertension or asthma. The company that processes your credit card transactions.

Sure, they’ll be impacted, but the impact on their business is probably, at most, minimal. And most important of all to you and to me is that it is very likely to be temporary. All of these temporary company setbacks add up to a very likely temporary market setback.

Let me be clear. I in no way want to minimize the impact of what has occurred. It has changed many lives forever. But it is unlikely to have a lasting impact on companies’ fortunes and thus on the stock market. History has shown us this on many occasions.

The best thing you can probably do financially is nothing. Those who believe in stocks for the long run could even be buying. In times like these, stocks tend to move, as the saying goes, “from weak hands to strong hands.”

Setting the financial world aside, you can look around you and be more thankful than ever for what you do have. Your health. Your friends. Your family. Your faith. Those you love and who love you. And if you’re so inclined, say a prayer for those who need it most today.

If you need to talk, please feel free to call me. I will be in the office all day today. -- Bob Cable, 9/11/01

Lessons Learned

1) Act fast.

2) Take a stand. Lead.

Send an e-mail, that day, telling your clients what to think. They nominated you as their leader. Get on the phone and call the people who do not have access to e-mail.

3) Be prepared. It will happen again.

This blog post, as well as many others, is based on my survey “Best Practices 2011.” I have promised survey participants a free copy of my enhanced ebook, “Making Referrals Happen.” By filling out the survey, you can compare your answers to “best practices.” The survey is still open. You can take the survey here. Past articles in my best practices series are archived here.